Telcos Start Thinking About Wireline ARPU

from the copying-ideas-that-don't-work dept

Average revenue per user, or ARPU, is a metric that's common in the wireless telco world. It's simply a measure of the average revenue each subscriber generates, and while it's a useful number, the industry's obsession with it is unhealthy, one big reason being that it only gives an idea of revenues, not profitability. However, it looks like telcos are beginning to use ARPU-think in their doomed battle to get people to hang on to their landlines, by trying to bundle in all sorts of data services (via Broadband Reports) to wired phones. The problem is that the landline business is a dying market, and adding services like movie times and stock quotes to normal landline phones isn't likely to keep many users from giving them up. The focus instead should be on profitability instead of incremental revenues -- get people to switch to platforms like VoIP that carry lower costs for the provider than landlines, and replace their landline with a broadband line. The focus here isn't on driving new services or lowering costs, it's just another ultimately fruitless attempt to get people to hang on to their landlines. One slightly unrelated note, in the context of the net neutrality debate: while the telcos talk about how somebody's got to pay for all that infrastructure, the fact that they trying to offer competing services for which they want to charge outside providers underlines their double standard.

Reader Comments

These are great

They'll just accelerate the rate at which landlines, computers, and mobiles converge.

Anyway, landlines still have a role. I call folks at landlines when I want to talk to someone at the address (say, either member of a couple), while I call a mobile when I want to talk to someone specific. I am happy to call someone's house an leave a message even when I have their mobile #. In fact I usually check the mobile caller ID whereas if I don't feel like it I just won't bother to get up when the landline is ringing.

Eventually these functions will be possible with mobiles too.

(PS: even when a technology is on its way out there can still be significant value to be obtained (by users and providers) in the waning days).